Emergencies are going to happen. As long as you are living and breathing, you will have emergencies in your life. Job loss, a death in the family, a medical event, a flat tire. So, if we know emergencies are going to happen, why do we choose not to prepare for them?

Think of an emergency fund as your day-to-day living insurance. It’s there to buffer you from whatever life throws your way. While dealing with the actual emergency can be very stressful, not having the funds set aside to deal with crisis adds an entire layer of stress. When you have an emergency fund in place, you can breathe a little easier knowing that the financial part of the crisis can be taken care of.

An emergency fund also allows you to make life decisions from a clear and calm headspace. Just think about a job loss. If you lost your job today, how would you react to it? Besides feeling shock and sadness over the event, would you be panicking about how you would be able to pay the bills? Let me tell you – severance can run out quickly. I know this from experience.

Having an emergency fund means not having to take the next available job because you are desperate for income. Having an emergency fund means you can fly home if there is an emergency and be there for your family or friends. Rather, it allows you to slow down the process, work through the emotions of the job loss, and provide you time to find the next amazing opportunity.

Let me be clear – credit cards should not be your emergency fund. I repeat, credit cards should not be your emergency fund. Don’t add insult to injury – literally – by tacking on 15%, 18% interest on to an emergency. That $2,000 emergency could easily turn into hundreds of dollars of interest, putting you farther behind financially. Being prepared with an emergency fund gives you the peace of mind that you will be able to handle an emergency financially and not be paying for it later.

Here are the steps you need to take to begin building an emergency fund:

1) Decide how much of an emergency fund you want to keep. When women ask me how much they should keep in an emergency fund, I tell them that it all depends on your comfort level. For some, it may be three months of expenses; for others, it may be six months.

You have to decide for yourself how much makes sense for your life. Consider your occupation and/or your lifestyle. Are you a freelancer? You will probably want to keep at least six months on hand – possibly more.

2) Calculate how much money it will take to fully fund your emergency fund. This is where having a budget in place makes it easy to determine what your monthly expenses are. Take a look through your budget and decide what expenses are crucial.

I’m not talking about the line item for entertainment or yoga classes. I am talking about the basic expenses you need to live – food, shelter, utilities, transportation, insurance. What expenses would you need to survive, not necessarily how you would want to live long term. Take that monthly amount and multiply it by the number of months that you want reserved in your emergency fund. This is your target number for what your fully funded emergency fund will be.

3) Create a plan for your money so you know how much you can save each month. The amount you just calculated may feel daunting, overwhelming, or impossible to achieve. Trust me – I felt the same way too! But remember – small actions over time yield big results. There is no one saying that you have to complete your emergency fund in a certain amount of time. And chances are, you will have to use the emergency fund before it is fully funded. The point is that you are getting started putting a buffer between you and life!

In order to find money to start your emergency fund, you need to understand where your money is going. Enter the budget. Creating a budget will allow you to know how much you will be able to save in that fund. You see, if you don’t know where your money is going every month, how do you know if you really have anything left over to save for an emergency.

I get it. Budgeting can seem painful and complicated. But at the end of the day, it’s much better to know where your money is going than cross your fingers and pray that you have enough money for the electric bill to get paid. It’s not worth being stressed out.

4) Set up a separate bank account for your emergency fund. In my case, I set it up with an entirely different bank than the credit union I use for my regular household expenses. I use a high-yield online checking account that has a debit card attached to it. This way I can access the funds if a true emergency happens, but I won’t be tempted to transfer funds into my regular checking account.

5) Set up an auto-debit for your monthly contribution to your emergency fund. As part of your budget when you are funding your emergency fund, you may have a line item for your emergency fund. Put that bad boy on auto transfer to your emergency fund account so that you don’t forget – or “forget” – to transfer those funds. Otherwise, it’s just too easy to spend that extra money on the dollar bin at Target (not that I have done that but I’m just sayin’…).

I will tell you that having an emergency fund has been a lifesaver for me. Not only has it given me the peace of mind to be able to cover life’s emergencies, but life has thrown me curve balls that made it necessary to use the emergency fund. I know that the crises that have led me to use the emergency fund were definitely lessened by the fact that I didn’t have to worry about the financial part of the crisis and I could focus on the actual issue at hand.

We can’t control a lot of what gets thrown at us in life be we can be prepared to handle it financially. Start building your emergency fund today!